Sponsorship in Formula 1 //How much of an influence money can buy in motorsport

This article was originally written for BellaOnline, but is republished here for posterity.

Let’s imagine that you have come into a bit of money. Actually, let’s imagine that you have inherited a vast fortune. You’re a huge Formula 1 fan, I know, and you want your favourite team to continue racing. They get a huge proportion of their income from sponsorship, so perhaps you want to invest? Let’s have a look at the different types of sponsorship available and the price brackets they fall under.

Up to $3 million

This is the cheapest option available and is less of a sponsorship and more of an association. Companies will take this route if they don’t care about having their name on the car but would rather be able to use the fact they are associated with the team as a marketing and promotional tool. This would usually occur within the industry, so tool suppliers, or uniform distributors. For example, the name of the company would appear in a small area on the car but the headed notepaper would include an image of the car out on track.

$3 million to $15 million

The middle price bracket is for interested parties who do want their name on the car and want to be able to associate themselves with the image of not just the car, but the sport in general. For example, technology companies would want to be linked with Formula 1, as it is perceived as very advanced and cutting edge. Another benefit would come from the hospitality benefits of being involved with a team, front row seats, glamorous team dinners, and access to the pit lane before races. This can go down well in corporate entertaining.

$15 million to $50 million

For this much money, you would expect to be a title sponsor. This means that your company name is actually included in the team, for example ING Renault F1. Your name would be in all the prominent positions on the car, littered around the garage, motor home and transporters, and would be listed in the grid and finishing positions on the TV.

Obviously the prices vary, depending on where you are on the car, and which team you are associated with. One of the front runners can afford to charge more for the advertising space on their car, whilst back markers have to reduce their fees.

It’s also worth remembering that associating with any team is only worthwhile if the team is performing respectably. You don’t have to be winning the championship, but if you manufacture cogs for a gearbox, and your car is breaking down from gearbox failures all the time, this won’t reflect well on your company.

So, consider where to spend your fortune wisely. Having looked at the options, it may not be the best idea to pick your favourite team, it may require a bit more research than we originally thought.